10 January 2005
Before JO Hambro Investment Management’s (Johim) director of legal and compliance Hannah Marshall joined the specialist investment management business in June 2001, she was a property lawyer at City firm Orchard.
When she arrived there was very little time to swot up on her new sector. As Johim’s sole in-house lawyer and compliance officer she was tasked with supporting the business as it geared up for N2 – the date on which the Financial Services and Markets Act 2000 came into force.
“During the first six months I worked very, very hard and had to read the FSA’s [Financial Services Authority] handbook cover to cover to ensure that we were compliant with everything. So it was a real baptism of fire,” explains Marshall.
Additionally, within months of Marshall’s arrival, Johim registered in the US under the Securities and Exchange Commission (SEC) rules. Johim was required to do this because unless a company is SEC-registered, it is not permitted to act for more than 15 US clients. At first, registering in the US raised very few regulatory hurdles for Johim, but post 9/11 and Enron, the SEC has tightened considerably the regulations governing companies registered in the US.
Marshall argues that since 9/11 and N2 the whole financial services industry is much more aware of compliance issues. Consequently, since she joined, Johim’s compliance team has grown to four staff.
“The SEC has put in place a really hefty compliance regime for the financial services sector in the US. So now, not only do we have to comply with the FSA rules, we also have to comply with the SEC regime,” says Marshall.
Johim was launched by the blue-blooded Hambro family – including Richard Hambro – in 1986 to look after the interests of ultra-high net worth individuals and associated portfolios. The business was originally part of a group with JO Hambro & Partners and JO Hambro Capital Management. It demerged three years later.
Today, Johim is wholly owned by banking giant Credit Suisse Group, although Marshall insists the company has been left to run as an autonomous unit. Johim’s business has also evolved since the company was founded. Recently, its investment scope has widened to include charities and specialist funds.
Johim currently runs 19 open-ended investment companies (OEICs), including the Johim investment funds. In addition, the company also manages two European hedge funds – the Charlemagne fund and Pepin fund.
Johim also runs a Dublin-based hedge fund called the Waverton Investment Funds, which the company is trying to passport into Germany, Italy, Spain, Switzerland and the UK. Marshall argues that registering the fund in Germany is fairly straightforward, although completing the same exercise in Italy is proving to be much more difficult as it requires Johim to appoint correspondent banks and paying agents.
“Getting the fund registered in Italy has been a bit of a nightmare because of the way in which the Italian legal system and financial services industry works,” says Marshall.
Marshall tries to handle as much legal work in-house as possible and typically reviews any service contracts that Johim enters into. However, she farms out big ticket work and some specialist matters, including employment issues, to external legal advisers.
Johim does not have a formal panel as Marshall prefers to appoint lawyers on a case-by-case basis and according to their personalities. “I’m using a lawyer rather than a firm, so the most important issue for me is that I get on with a lawyer and he or she is good at their job,” she says.
Currently, Marshall instructs Simmons & Simmons on funds-related matters and has also retained the firm to advise Johim on passporting the Waverton funds into Europe. Meanwhile, she farms out hedge funds work to Dechert. Both firms also handle regulatory issues for Johim, although Dechert advises the company on US regulations because, according to Marshall, it is one of the few US firms which has US-qualified lawyers based in London specialising on SEC-related work.
Doyle Clayton and Pinsent Masons are retained to advise Johim on employment and litigation matters respectively. Pinsents also handles IT-related work for the company.
Last spring, Marshall instructed US firm Kilpatrick Stockton for the first time to negotiate a lease relating to an additional 8,500sq ft in Johim’s existing office in London’s swanky St James’s Square. Marshall says that before Johim moved on to the new floor last December, the company was bursting at the seams so the extra space will allow Johim to bring in more fund managers.
Marshall was pleased with Kilpatrick & Stockton’s input and says that she will “definitely consider” instructing the firm again on property-related matters.
The financial services sector is coming under increasing pressure to ensure that it is compliant with the tough regulatory regime on both sides of the Atlantic and although Marshall started her legal career as a property lawyer, she has made significant inroads in ensuring Johim does not fall foul of the new regime.
Director of legal and compliance/company secretary
|Organisation||JO Hambro Investment Management|
|Sector||Fund management/financial services|
|Director of legal and compliance/company secretary||Hannah Marshall|
|Reporting to||Andrew Steel, chief operating officer|
|Funds under management||In excess of £2bn|
|Main law firms||Dechert, Doyle Clayton, Kilpatrick Stockton, Pinsent Masons and Simmons & Simmons|